Labour’s policy ghosts stalk the earth again

The Tories have only themselves to blame for discredited soft socialist
policies being taken seriously

Ed Miliband's policies on energy prices and private rents are an anachronism. What next? Price controls on food? After all, the cost of that most essential commodity has increased faster than wagesPhoto: Getty Images

First there was the Miliband promise of an energy price freeze. That went out of the picture pretty quickly when most of the electorate made clear that they didn’t believe it would ever happen. Next came the cap on private rents – which unravelled within 24 hours when a slew of Labour shadow spokesmen and current advisers were shown to have gone on record condemning it as unworkable.

What next? Price controls on food? After all, the cost of that most essential commodity has increased faster than wages. So why not fix the increases on basic foodstuffs such as bread, eggs and meat? Then when we are hit by the inevitable results of price-fixing – shortages and collapse of providers – we can introduce rationing to make sure that nobody goes without. Why limit yourself to going back to the Seventies when you can have a full-scale nostalgia trip to the Forties?

In the meantime, a lot of hard-working commentators have had to devote valuable column inches to an assiduous dismantling of these archaic ideas, because doing the everyday business of proper political debate with the Opposition, which should be the job of the party in power, has become their principal responsibility. So the only important question left is – why on earth are we still having this argument? Why are we wasting so much time and energy having to fight battles that were settled long ago?

Policies that are historically proven to be disastrous, impossible to implement, counterproductive (all terms used by Left-of-centre analysts about rent-capping) have suddenly risen from the dead to stalk the land with their sunken eyes and hollow voices. And we engage with them as if they were living, substantial beings rather than ghosts. How is it that specific proposals that were, within living memory, so definitively discredited must now be confronted all over again as if the outcome of that decisive war was utterly forgotten?

Why? Because the side that won refuses to admit it. Because the Conservatives, in their present incarnation, refuse to dwell on their past victory – in which they so effectively vanquished the command economy that the Labour Party had to reinvent itself to remain relevant to modern life. Having been proved demonstrably right on virtually every point that was up for contention with the Left, they have positively willed the country to forget what the disagreement consisted of, and what the consequences were of coming to the wrong conclusion.

So the country duly forgot. And those too young to have lived through that epic battle – who have no personal experience of what it was like to live in the Dark Age of the Seventies – have been deprived of the historical knowledge that might have been passed down in the folklore of a grateful earlier generation. The present-day Tories have so roundly renounced their own most significant accomplishments, and so successfully purged the party image of its collective triumph, that it is hard for anyone to recall what it was all about.

Advocating rent and price controls ought to sound as ridiculous as recommending a witch doctor as a substitute for antibiotics. Yet here we all are, fighting proposals that should be patently preposterous when we ought to be proclaiming (as David Cameron says repeatedly) the success of the Conservative strategy for economic recovery. But exasperating as it must be for Mr Cameron and his Chancellor to see Labour’s latest absurd pitch being given what appears to be careful and serious consideration, they have no one to blame but themselves. It was their calculated decision to downplay (putting it mildly) the ideological triumph of Thatcherite economic liberalism.

It was they who formulated the defining political strategy of their electoral era: to accept the premises of soft socialism as the universal dogma of the age, and to minimise the unabashed free market doctrine that had rescued the British economy from decline. No wonder they have nothing much to say about the bizarre Miliband revival of anachronistic economic remedies, when they implicitly bought into the whole package themselves by refusing to reiterate (over and over again, as they should have done) how wrong it all was the first time, and how clearly that had been demonstrated during their own years in office.

Nothing could illustrate the persistence of this bloody-minded repudiation of their own party’s economic success more clearly than the obstinate refusal to raise the threshold on higher rate income tax. In his speech on Friday opening the European and local council election campaigns, Mr Cameron enunciated once again his party’s belief in “the value of aspiration”, and lauded those who were “determined [to] work hard and get on”.

He did not go on to point out that those wretches who managed to earn half as much again as the average wage by having aspired, worked hard and got on, would be officially regarded as the tainted “rich” for tax purposes. This captures precisely the essence of the great contradiction in the Tory case which so disables them in the face of Ed Miliband’s socialist revival. By next year, the people who have behaved in precisely the way Mr Cameron advocates will be rewarded for their efforts by having to pay two-thirds of the national income tax bill, even though they constitute only 16 per cent of the population.

So which is it? Are they virtuous and deserving of Conservative support, or are they the evil, undeserving wealthy of Labour imagination? Does the Cameron-Osborne political philosophy approve of aspiration and self-improvement, and believe they should be recognised? Or has it accepted the Left’s view that anyone earning even 50 per cent more than the average should be penalised?

Actually, I don’t think that either Mr Cameron or Mr Osborne has very strong feelings about – or much understanding at all of – the sort of people who have just broken through into the higher-rate tax bracket. (The infamous Osborne remark that people liked paying the higher rate because it meant they’d “arrived”, is evidence of this.) Nor is their refusal to raise the threshold based on economics: they have confined their tax breaks to the lowest paid because they believe it is politically clever. They are still determined not to be seen as the party of the middle class. They want to fight Labour on its own ground – as champions of the poor.

This economically literate Chancellor surely knows that to give higher earners more disposable income would provide a tremendous stimulus to the economy. They are the people who will buy a new car, convert the loft, put in a new kitchen: in short, spend the kind of money in the sorts of ways that could accelerate what has been called the slowest economic recovery in modern history. But so far, his ill-advised political strategy has taken precedence over his economic judgment.